Smallscale Forestry Projects Under The

Two basic reasons justify the introduction of small-scale projects: transaction costs and equity. Small projects are unlikely to pay the modalities and













5 10 15 20 25 30 35 40 45 50 55 60 Years to expiry

5 10 15 20 25 30 35 40 45 50 55 60 Years to expiry procedures (M&P) costs associated with project development, and some low-income countries' participation in A/R is limited.

While simplified procedures may be applied to small-scale projects of less than 8Kt of CO2e, no specific procedure for assessment of proposed new small-scale afforestation and reforestation methodologies had, at the close of 2008, been outlined by the Executive Board (UNEP Risoe, 2008a). New methodologies need to be submitted that simplify M&P and thus cut the costs of small-scale projects. But a downside is that such reduction in costs is likely to put in jeopardy the environmental integrity of projects.

Locatelli and Pedroni (2006) showed that even with a reduction in M&P costs to 80 percent below those for large-scale A/R projects, the probability of small-scale projects becoming viable is small. The carbon accounting procedures adopted, that is, tCERs or lCERs, had little effect on viability, but an increase in price of credits might increase participation rates.

At the time of writing there were only 14 small-scale AR projects in the CDM pipeline (UNEP Risoe, 2008b), suggesting that small-scale projects may not fulfill their expectations.

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